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Bears dominate stock market

RECORDER REVIEW

KARACHI: Bears dominated the proceedings, snapping over a month's supremacy of bulls on the Karachi Stock Exchange where all the investment and trading scrips declined sharply owing to technical and external factors.

The market during the week saw widespread selling where most of the analysts termed the fall as the "correction".

However, some of the external factors send dangerous signals and created panic among the investors.

The Karachi Stock Exchange 100 index recorded a decline of 73.52 points to 1906.91 from 1980.43 of the previous week. The volume during the week amounted to 1.338 billion shares as against 1.408 billion shares of the preceding week.

The trend was mostly marred with clashes reported near the Line of Control. The market received several rumours on the same incidents, which put more pressure on the traders and in haste they unloaded their portfolios. The sharp rise in defence spending announced by Indian government in its budget, forced the genuine investors to leave the arena, giving free hand to bears.

According to an analyst the report filtering in sent grave signals to investors, the war games conducted by Indian armed forces was the main factor. The accumulation of weapons and threatening attitude of the present Indian government created doubts in the minds of investors to play long. The high badla rate was indicative of the market's bearish outlook. Weak holders offloaded their positions on an extensive scale throwing the market into tallspin.

There were only sellers and no buyers. The selling pressure heralded from upcountry punters was also one of the factors for the free fall of prices.

Another destabilising factor was the unabated tussle between Wapda and Hubco which put more pressure on the investors. Though the government has removed one of the cases from the company on meter tampering but analysts said a lot is required to resolve the issue. They said the parties should resolve the issue without any further delay. The resolution of this dispute will not only be beneficial to the country but also to the company.

All the scrips which were in the buying charts of the investors for the last couple of weeks, saw a spree of selling. However, one thing, which was positive for the market was the presence of financial institutions.

The index during the week breached the 1900 level and even slipped from the resistance level of 1850, target of most of the local punters.

However, with the help of some of the speculative activities and short covering, the index started to make a recovery and closed above the 1900 mark.

An analyst said that future of the market was very much linked to implementation of economic revival and privatisation programme of the government in the spirit in which they have been conceived. He urged the government to immediately resolve the Hubco issue to lure foreign investment in the country.

PTCL on a business of 636.830 million shares recorded a fall of one rupee to 31.65, Hubco on a trading of 234.631 million shares moved down to Rs 26.55 from 27.70, PSO on a volume of 143.295 million shares closed at Rs 255, indicating a net drop of Rs 7.50. ICI on a turnover of 113.867 million shares denoted an increase of 30 paisa to Rs 14.45 and Sui Northern Gas slipped by Rs 2.35 to Rs 21.50 as around 51.706 million shares changed hands.

The week was full of announcements with companies declaring good dividends Ñ Bhanero Textile 80 percent, Mitchell's Fruit Farm 45 percent, Noon Sugar 40 percent, Olympia Spinning Mills, Shahtaj Textile Mills, Chashma Sugar, Al-Faysal Inv. Bank, Habib Sugar Mills, Ellcot Spinning Mills 20 percent each. Reliance Cotton Spinning and Kohinoor Sugar 15 percent, Nagina Cotton, Quetta Textile, Gulf Commercial Bank, Zaman Textile Mills, Hamza Textile, Fazal Cloth, Prosperity Weaving Mills, Kohinoor Textile 10 percent each. Khalid Siraj Textile 7 percent, Soneri Bank 20 percent bonus. Al-Ghazi Tractor 50 percent (interim dividend) and Associated Industries 15 percent. Dewan Sugar, Dewan Mushtaq and Dewan Khalid 10 percent bonus and 12.5 percent dividend each and Dewan Textile Mills 25 percent and 10 percent bonus. Shahtaj Sugar Mills 25 percent, Al-Noor Sugar, Shahmurad Sugar and Faran Sugar 7.5 percent each, Metropolitan Bank 25 percent bonus, Cherat Papersack 45 percent interim dividend, Regal Ceramics 5 percent, Din Textile 30 percent. Globe Textile 10 percent and 33.33 percent bonus, Globe Textile 10 percent and 50 percent bonus, Mahmood Textile 60.51 percent, Premier Sugar 100 percent and Frontier Sugar 47.5 percent.